Marilyn Stone owns the mineral rights to 640 acres in Coleman County, Texas. Marilyn leases the property...

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Marilyn Stone owns the mineral rights to 640 acres in ColemanCounty, Texas. Marilyn leases the property to SunriseOil & Gas (“Sunrise”) reserving a 1/5 royaltyinterest. Sunrise drills a successful well and beginsproducing oil. Before the first month’s productionSunrise assigns a 5% ORRI to its engineer, TomJacobs. In January 2019 Sunrise incurred $45,000 oflease operating expenses, produced and sold 10,000 BBLs of oil at aprice per BBL of $52; the severance tax is 5%. Sunrise assumes theresponsibility of distributing revenue and paying severancetaxes.
REQUIRED (you must show yourwork):
What is the gross revenue to each party?
What portion of the tax does each party pay?
Record the sale for the working interest owner, royaltyinterest owner, and ORI owner.

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Marilyn Stone owns the mineral rights to 640 acres in ColemanCounty, Texas. Marilyn leases the property to SunriseOil & Gas (“Sunrise”) reserving a 1/5 royaltyinterest. Sunrise drills a successful well and beginsproducing oil. Before the first month’s productionSunrise assigns a 5% ORRI to its engineer, TomJacobs. In January 2019 Sunrise incurred $45,000 oflease operating expenses, produced and sold 10,000 BBLs of oil at aprice per BBL of $52; the severance tax is 5%. Sunrise assumes theresponsibility of distributing revenue and paying severancetaxes.REQUIRED (you must show yourwork):What is the gross revenue to each party?What portion of the tax does each party pay?Record the sale for the working interest owner, royaltyinterest owner, and ORI owner.